June Gold Futures Back Above 1300.0

A fresh round of tariffs and global economic growth concerns have boosted risk aversion for the Tuesday session. Investors are bidding June GOLD futures for the second consecutive day, prompting a spike above the 1305.0 handle.

The rally in bullion began in earnest on Monday, following U.S. President Trump threatening to slap $11 billion in tariffs on various E.U. products. In addition, the International Monetary Fund (IMF) revised global growth forecasts down to 3.3% for 2019. This is a substantial cut from the previous figure of 3.5%, most likely a result of the IMF expecting U.S. growth to drop from 2.5% to 2.3%.

The beneficiary of investor angst has been June gold futures. Prices have already rallied more than $12.50 per ounce this week, ahead of Wednesday’s FOMC Minutes.

June Gold Futures: Technical Outlook

Bearish action dominated the trade of gold during the latter stages of March. Early April has been a different story, with June gold futures breaking out from a prolonged “L” formation on the daily chart.

June Gold Futures (GC), Daily Chart

As we roll into the midweek, here are a few levels to watch for June gold futures:

Resistance(1): Daily SMA/62% Current Wave Retracement, 1313.3

Support(1): Bollinger MP, 1305.9

Bottom Line: As a general rule, the convergence of technical indicators adds validity to the pricing level in question. For June gold futures, the Daily SMA and Current Wave 62% Retracement fall at 1313.3, creating a possible short entry.

Sells from 1312.9 are a good way to fade the recent bullish action. With an initial stop placed at 1314.7, this trade produces 15 ticks on a slightly sub-1:1 risk vs reward management plan.

About the author

Shain Vernier
// US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.

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